Iron Horse Acquisitions Corp., a blank check company targeting the media and entertainment sector, has closed its initial public offering, raising USD $69 million.
The special-purpose acquisition company (SPAC) offered 6.9 million units priced at $10 each. These included 800,000 units offered by the company to cover over-allotments, according to a press release on December 29.
Iron Horse, led by founder and CEO Jose A. Bengochea, aims to identify and merge with a business within the media and entertainment landscape. Their focus areas include production studios, celebrity-backed content creators, talent-facing consumer products, gaming, fantasy sports, music rights aggregators, music licensors, international music labels, K-POP, AI, social media marketers, talent management & talent services and more, the company said in the press release.
Bengochea is the founder and CEO of Bengochea Capital LLC, an investment firm founded in 2020, and a registered media entity with the Recording Academy for the 2023 Grammy Awards. Prior to founding Bengochea Capital, he was a part of Sony’s Global Business Development team in Los Angeles from 2018 to 2020.
The offering was led by sole bookrunner EF Hutton LLC, with Brookline Capital Markets acting as co-manager. Iron Horse’s units began trading on the Nasdaq Global Market under the ticker symbol “IROHU” on December 27.
Each unit consists of one share of common stock, one full warrant, and one right to receive one-fifth of of one share of common stock after the SPAC’s merger with a chosen business. According to a prospectus filed with the US Securities and Exchange Commission (SEC), the warrant gives the holder the right to purchase one share of common stock in the company at $11.50, following a merger, but not later than five years after the merger.
“Our team has demonstrated an extensive track record of successful acquisitions, value creation, and value enhancement in media & entertainment industry and has access to proprietary opportunities globally that can be leveraged to drive value.”
Iron Horse Acquisitions
The units are expected to trade separately eventually, with the common stock trading on the Nasdaq under the symbol “IROH,” the warrants under “IROHW” and the rights under “IROHR.”
Iron Horse’s leadership team also includes COO Bill Caragol, CFO Jane Waxman (former Executive Vice President and Deputy CFO at 20th Century Fox), Chairman Brian Turner, and Independent Directors Ken Hertz (who, among other things, served as Vice President, Music — Business and Legal Affairs at The Walt Disney Company), Scott Morris, and Lisa Harrington.
“We believe that our team has desirable attributes to potential targets in the M&E space. Our team is a multi-cultural, multi-ethnic mixture of seasoned public-company executives, Hollywood insiders, media operators, media investors, and individuals with ample public markets and M&A experience,” Iron Horse said in its prospectus.
“Our team has demonstrated an extensive track record of successful acquisitions, value creation, and value enhancement in media & entertainment industry and has access to proprietary opportunities globally that can be leveraged to drive value. Our team’s proprietary connections include touchpoints to, for example, celebrity-owned studios and brands, family entertainment media, animation, talent management, and music, including direct relationships with many celebrities.”
The SPAC landscape in music has witnessed some notable mergers in recent years, paving the way for Iron Horse’s potential foray.
Nearly two years ago, Spotify’s France-based rival Deezer merged with a blank-check company to become a publicly listed firm on the Euronext Paris, giving it an enterprise valuation of approximately €1.075 billion (USD $1.19 billion).
Alliance Entertainment, a US-based distributor and wholesaler of music, movies, video games, electronics, arcades and collectibles, last year merged with blank check company Adara Acquisition, valuing it at $480 million.
Most recently in December, Singapore-based tech company FENIX360 agreed to be acquired by US-based blank check company DUET Acquisition Corp. The transaction, which values FENIX360 at $610 million, is expected to be completed in the first half of 2024.
However, not all music-focused SPACs have been successful. The Music Acquisition Corporation (TMAC), former Geffen Records President Neil Jacobson’s blank-check company, filed to liquidate over a year ago as the board believed that the SPAC was “very unlikely” to complete a business combination by its target date.
In December 2022, Liberty Media Acquisition Corporation, launched by media giant Liberty Media, also wound down its business after being unable to finalize mergers with any potential targets, despite assessing “more than 140” target companies.
This past October, Iron Horse itself withdrew plans for a $100-million IPO. The company said the withdrawal was due to “a confluence of changes in market conditions, changes in the proposed offering terms, and changes in the Company’s financial statement” since its initial IPO filing with the SEC.Music Business Worldwide